We all understand the impact that foreclosures have on our communities and property values. Well now, Cuyahoga County is doing something about it. In April, the new Cuyahoga County Land Bank will become operational.
But before I give you the details, let me share some staggering facts. According to Cuyahoga County Treasurer Jim Rokakis, there were between 3,300 to 3,500 properties foreclosed in Cuyahoga County in 1995. By 2000, that number was up to 7,000. In 2006, there were 13,000 foreclosures, and in 2007 over 15,000 foreclosures. Today, there are around 35,000 vacant structures in Cuyahoga County, with at least 15,000 waiting demolition at an estimated cost of $150 million.
“We know this is killing values,” said Rokakis. “We know it’s destroying confidence in our neighborhoods. And it’s all being exasperated by a number of practices. In the beginning, there were more sophisticated speculators” buying the properties. “It was all an illusion. If you think about all of the properties that were flipped and all of the sales prices, that money went to someone, and in a strange way, it was a bump to the Cleveland economy.”
According to Rokakis, “flipping” is the practice of buying a property on Monday and selling it on Thursday, with no improvements, for a big profit.
“Since 2000, it’s been ‘flipping’ on an industrial scale. It’s like nothing we’ve ever seen before,” he indicated.
“Now, that the good properties have been picked over, we have ‘vultures’ coming in and picking what’s left. Properties are being sold on E-Bay. We also have people buying up 100 homes at a time from REO divisions of banks that want no part of these properties. They buy them for $500 to $1,000 a property and then sell them to the next person for $2,000 to $2,500. Right now, the single largest landlord in Cuyahoga County is Deutsche Bank with close to 2,000 mortgages and titles. Something had to be done. There had to be some intervention,” he stated….